1986 (8) TMI 444

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..... ing the entire accounting period relevant to this assessment, it was outside the territorial limits of the Union of India except for eight days commencing from 8th March, 1974. 3. The assessment had been completed under s. 143(1) on 28th Aug., 1975 by the ITO. The assessee filed a revision petition and the CIT, acting under s. 264 set aside the assessment with the direction to the ITO to examine the taxability of the salary income. In the original assessment, the ITO had treated the assessee as resident although it had claimed the status of non-resident , without affording an opportunity of being heard. On this question, the CIT modified the order holding that the assessee should be taken as non-resident . Subsequently, the ITO compl .....

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..... V.G. Every 1937 5 ITR 216(Cal), CIT vs. Chunnilal B. Mehta (1938) 6 ITR 521(PC), C.G. Krishnaswamy Naidu (1966) 62 ITR 686(Mad), besides the cases referred to by the AAC in his order. 6. We have considered the submissions on either side and gone through the authorities. In this case, the agreement was outside India. For the entire period, barring eight days commencing from 6th March, 1974, the assessee had worked outside India as Chief Engineer of the ship which was sailing outside. The amount had been received outside India. It is clear from the authorities that the place of contract is not the material. Neither the source from which the payment was made. The real decider is where the services were rendered. As pointed out in the matter .....

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..... is age, no amount is payable as advance. This is not a case the advance is paid on account of some business contract. In the case of salary, the accrual is on account of work done every day and an officer is entitled to salary as and when earnings made though the payment is made at the end of the month. Therefore, it can not be said that the assessee had not earned wages or salary so long as he was in foreign waters. Substantial income had been earned by the assessee outside Indian territories. Consequently, there cannot be any apportionment merely because for eight days the assessee had been in India. 8. The ld. counsel for the assessee brought to our notice the clarification issued by the CBDT in Circular No. 356, dt. 17th March, 1983 .....

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